China Inc's Destruction of Nigeria's Textile Industry

Don't let the patterns fool you; these are PRC-made through and through.

It is no big secret that China's textiles have found a ready market the world over due to their relatively low price and high quality. This trade phenomenon, however, can be a mixed blessing for those that buy them: In Nigeria, the "resource curse" is in full swing as the demand for energy exports has sapped the competitiveness of import-competing sectors--including textiles. Widespread smuggling of textiles into Nigeria has certainly not helped matters as an entire country beside Nigeria, Benin, specializes as a gateway for contraband goods to the rest of the African continent:

The
Nigerian stretch is the final leg of a 10,000km journey. It begins in
Chinese factories, churning out imitations of the textiles that
Nigerians previously produced for themselves, with their signature prime
colours and waxiness to the touch. By the boatload they arrive in west
Africa’s ports, chiefly Cotonou in Benin, a tiny country beside Nigeria
whose major economic activity is the transshipment of contraband. At the
ports the counterfeit consignments are loaded on to trucks and either
driven straight over the land border between Benin and western Nigeria
or up through Niger and round to the border post with its taciturn
chief. The trade is estimated to be worth about $2bn a year, equivalent
to about a fifth of all annual recorded imports of textiles, clothing,
fabric and yarn into the whole of sub-Saharan Africa.

The Chinese being in the business of customer satisfaction, they have successfully copied garments in the local style, to the chagrin of Nigerian producers who simply cannot compete. For all its energy exports, the truth is that the electricity infrastructure of Nigeria is woefully inadequate, severely handicapping what's left of the local textile industry as high operating costs put them out of business:

At
Raymond Okwuanyinu’s stall I found rolls and rolls of the coloured
fabric that is used for fashioning a popular style of billowing
trousers. Here there was no attempt at subterfuge. Raymond told me it
was a matter of simple economics. Nigeria may be the largest source of
African energy exports, but it generates only enough electricity to
power one toaster for every 44 of its own people. Billions of dollars
assigned to fix the rundown power stations and the dilapidated grid have
been squandered or pilfered. A privatisation drive in recent years has
raised some tentative hope of improvement, but for now Nigeria produces
only half as much electricity as North Korea.

Even
those lucky enough to be connected to a functioning cable face the
maddening task of negotiating with what used to be called the National
Electric Power Authority or Nepa (but known as Never Expect Power
Anytime). It was rebranded as the Power Holding Company of Nigeria, or
PHCN (Please Have Candles Nearby or, simply, Problem Has Changed Name).
Most must make do with spluttering diesel generators. In a country where
62 per cent of people live on less than $1.25 a day, running a
generator costs about twice as much as the average Briton pays for
electricity.

The
crippling cost of electricity makes Nigerian textiles expensive to
produce. Raymond, the Kaduna trader, told me he could sell trousers made
from Chinese fabric at two-thirds the price of those made from Nigerian
fabric and still turn a profit. Hillary Umunna, a few stalls over,
concurred. The government’s attempt to support the Nigerian textile
sector by banning imports was futile, Hillary opined, his tailor’s
tape-measure draped around his shoulders. “These things now,” he said,
gesturing at his wares, “they say it is contraband. They can’t produce
it, but they ban it. So we have to smuggle.”

The decimation of local industry is nearly absolute as few local producers remain:

In
the mid-1980s Nigeria had 175 textile mills. Over the quarter-century
that followed, all but 25 shut down. Many of those that have struggled
on do so only at a fraction of their capacity. Of the 350,000 people the
industry employed in its heyday, making it comfortably Nigeria’s most
important manufacturing sector, all but 25,000 have lost their jobs.
Imports comprise 85 per cent of the market, despite the fact that
importing textiles is illegal. The World Bank has estimated that
textiles smuggled into Nigeria through Benin are worth $2.2bn a year,
compared with local Nigerian production that has shrivelled to $40m
annually. A team of experts working for the United Nations concluded in
2009, “The Nigerian textile industry is on the verge of a total
collapse.” Given the power crisis, the near-impassable state of
Nigeria’s roads and the deluge of counterfeit clothes, it is a wonder
that the industry kept going as long as it did.

While the influx of smuggled goods may be unfortunate, it too is driven by the inability of local manufacturers to produce wares at reasonable prices. This again is due to government failure in not being able to establish a reliable and affordable energy supply. After all, Nigeria is a massive energy exporter, right? In this case, it's more a matter of domestic failings than China being unwilling to stamp out smuggling that's behind the phenomenon even if Chinese authorities could do more about the latter if they really cared--but they probably don't since Nigeria represents "market diversification," however controversial the trade.